COURSE DESCRIPTION
This course provides a comprehensive examination of Islamic insurance (Takaful) and Islamic investment principles, instruments, and structures. Takaful represents a Shari’ah-compliant alternative to conventional insurance, operating on principles of mutual cooperation, solidarity, and shared responsibility among participants rather than risk transfer to a single insurer. The course explores the theoretical foundations, operational frameworks, and contemporary applications of Takaful products alongside Islamic investment vehicles, providing students with a thorough understanding of this rapidly growing sector of Islamic finance.
The course is divided into two complementary parts. The first three periods draw on Mohd Ma’Sum Billah’s Islamic Insurance Products: Exploring Takaful Principles, Instruments and Structures, which provides a comprehensive overview of Takaful products and their Shari’ah-compliant structures. The final two periods utilize Aly Khorshid’s Islamic Insurance: A Modern Approach to Islamic Banking, which examines the jurisprudential foundations of insurance in Islam, addressing the classical debates on Riba (usury) and Gharar (risk) while tracing the development of mutual insurance as a viable Islamic alternative.
Topics covered include the foundational principles of Takaful, the prohibition of Riba, Gharar, and Maysir, the governing principles of Takaful and Re-Takaful products, general and specific Takaful products (Motor, Family, and Health Takaful), the historical and jurisprudential development of Islamic insurance, and the relationship between Islamic insurance and contemporary investment practices.
COURSE TEACHING OBJECTIVES
1. To provide a comprehensive understanding of the foundational principles of Takaful (Islamic insurance) and their Shari’ah foundations
2. To analyze the key differences between conventional insurance and Takaful, particularly regarding the prohibitions of Riba (usury), Gharar (excessive uncertainty), and Maysir (gambling)
3. To examine the various Takaful products and their operational structures, including General Takaful, Family Takaful, and Re-Takaful
4. To evaluate the jurisprudential debates surrounding insurance in Islam, from classical to modern perspectives
5. To explore the relationship between Islamic insurance and Islamic investments, including the role of Takaful operators in managing investment portfolios
6. To develop practical skills in analyzing Takaful contracts and their Shari’ah compliance
COURSE STUDENT LEARNING OUTCOMES
Upon completion of this course, students will be able to:
1. Articulate the foundational principles of Takaful and explain how they differ from conventional insurance
2. Identify and explain the key Shari’ah prohibitions (Riba, Gharar, Maysir) and their implications for insurance and investment products
3. Describe the various Takaful products and their operational structures, including General Takaful, Family Takaful, and Re-Takaful
4. Analyze the historical and jurisprudential development of Islamic insurance, including the arguments of pro- and anti-insurance jurists
5. Evaluate the Shari’ah compliance of Takaful contracts and investment vehicles
6. Assess the role of Takaful operators in managing investment portfolios in compliance with Islamic principles
7. Develop comprehensive frameworks for analyzing and structuring Islamic insurance and investment products
Organization of Course Studies
The course is organized into five study periods (typically 2–3 weeks each, though self-paced). Each period includes intensive reading of the assigned textbook chapters, viewing of the supplementary video, and a short response paper or reflective assignment (500–1,000 words) reflecting on the material and its application.